Reason Foundation

Hydrogen-Powered Buildings

Fuel cell powered and hybrid buildings offer several benefits

The public policy debate over hydrogen fuel cells and energy efficiency has focused primarily on vehicles — mobile sources of pollution. But consider the challenges of using hydrogen fuel cells in vehicles: hydrogen is volatile and combustible, and because it is a less intense fuel source than gasoline, storing either hydrogen or the natural gas or water to generate it takes up a lot of space. Even hybrid vehicles face similar problems. The onboard battery that stores electricity to provide the electric part of the power is heavy and bulky. So although the pollution reduction benefits of alternate fuels for mobile sources may be high, the costs and obstacles are also high.

It should come as no surprise, then, that there is a market for stationary hydrogen and/or hybrid power. Installations of hydrogen fuel cells and hybrid engines are occurring in commercial and residential (particularly multi-unit) buildings. Relative to vehicles, the large engine footprint does not matter as much, nor does the weight of the engine. While hydrogen fuel cell and hybrid engines to power buildings may not appear to reduce pollution as effectively as using them in vehicles, using them in buildings provides several benefits and avoids some of the costs encountered with vehicles.

Building power use is increasing as the intensity of our electronics use rises. Thus increasing energy efficiency in buildings enables us to satisfy increased electronics use with a smaller amount of energy input for every kilowatt hour of power generated. Energy efficiency therefore also decreases the energy cost per kilowatt hour of power generated.

Distributed generation (DG) is one effective way to achieve increased energy efficiency in buildings, through both traditional and alternative engines. DG uses an on-site generator to provide power for a building, which means that the building does not have to use power from the local utility, delivered through the local grid. Alternately, it could mean a building manager could choose when to use the DG and when to use power from the grid, or could use the DG as a redundant backup power system. Such backup is crucial for buildings that house high-reliability functions like hospitals, financial services, and data centers. DG can be quite energy efficient, providing a good ratio of power generated/energy input (kwh/BTU). In particular, a DG system called combined heat and power (CHP) can be very energy efficient because CHP uses waste heat from the electricity generation process to provide climate control.

One reason why DG in buildings could be a good use of hydrogen fuel cells and hybrid engines is that on-site DG can use direct current (DC), not alternating current (AC). The existing distribution grid uses AC, which when electricity was young in the late 19th century could transmit more power over longer distances than DC. What is interesting about DC, though, is that some of the largest energy uses in buildings translate AC to DC when the power comes into the building from the grid. Florescent lighting, for example, is much more efficient when run on DC, and florescent lights also come with standard fixtures that can accept either incoming DC or AC. If a building runs an on-site hydrogen fuel cell or hybrid engine generator (or any other kind, for that matter), it creates direct current, and can power lighting systems without the translation from AC to DC, which of course takes some energy. Not having to do this translation improves the energy and economic value of the on-site generators relative to traditional power from the grid. While hydrogen fuel cell and hybrid buildings are still more expensive than traditional grid power per kilowatt hour generated, their continuing innovation provides an alternative to hooking up to the local utility's grid.

Hydrogen fuel cell and hybrid buildings would reduce pollution in various ways. By substituting for fossil fuel-generated power the use of fossil fuels would decrease (although it would not disappear entirely, as discussed on Monday). Furthermore, to the extent that they increase the kilowatt hours generated for every BTU of fuel used, the decrease overall energy use. In an Energy Pulse (www.energypulse.net) article from 11 March 2003, Paul Savage, CEO of Nextek Power Systems, makes the point with regard to hybrid buildings:

"Ultimately, we will see hybrid buildings powered by combinations of grid power and alternative power sources, such as fuel cells, wind turbines and solar energy — without the need for multiple conversions of AC to DC at each device. The result will be energy that is more abundant, less dependent on foreign sources, safer and more reliable than grid power alone. These — networks can deliver loads up to 50 percent more usable energy from DC sources — similar to the pick-up in efficiency hybrid vehicles deliver versus the internal combustion engine alone."

Buildings can also be a good way to test-bed technological change that can later be applied to vehicles. Hydrogen fuel cell and hybrid building research could inform the research on hydrogen fuel cell and hybrid vehicles, and make them cheaper, more energy efficient, and therefore more potentially commercial.

Hydrogen fuel cell and hybrid buildings will not replace traditional grid-powered buildings quickly, both because of higher cost and because of the installed base advantages (and associated high switching costs) of the grid. However, as hydrogen fuel cell and hybrid buildings provide increasingly commercially viable alternatives to traditional grid distribution, building managers are more likely to choose to install them to decrease their energy use rate and to provide the benefits of reliable, cleaner power.

Lynne Kiesling is director of economic policy at Reason Foundation and senior lecturer in economics at Northwestern University.

This is part 4 of Reason's 5-part Let the Hydrogen Economy Evolve series: